Finally we are starting to see automakers, albeit just one to start with – Hyundai, try a more deliberate approach to retailing vehicles equipped with alternative powertrains like EVs. Hyundai’s forthcoming Ioniq, offered first as an EV and later as a plug-in hybrid EV, will feature what the automaker is calling its future mobility services strategy. “Ioniq Unlimited” is no typical lease program. In addition to offering lease terms as short as 24 months, the program wraps unlimited free charging and scheduled maintenance into the lease payment. The scheme departs from traditional auto retail in that it addresses the up-front cost barrier that continues to dog EV sales. It also addresses some of the added risk that EV buyers face when making the switch from conventional platforms – like how much it will cost to charge up.
“Ioniq Unlimited” is no typical lease program. In addition to offering lease terms as short as 24 months, the program wraps unlimited free charging and scheduled maintenance into the lease payment
Up until now, every one of the major automakers has defaulted to using the very same sales channels and processes that have served conventionally powered gas vehicles for decades. And up until now, with the notable exception of Tesla, consumers interested in EVs have had to endure a retail experience that falls short on most customer satisfaction measures. Would-be EV buyers need dealers smart enough to answer an array of questions that go well beyond staid topics like color and trim package to include matters like federal tax credits and other government incentives, discounted utility rates and charging equipment options and use. Even these few topics barely scratch the surface of all that a dealer must know to adequately serve EV customers. Yet in too many cases, customers may find themselves unwittingly deterred by professional salespeople who may be more focused on selling something familiar and closing the deal quickly than taking the extra time to inform and guide customers through the more complex and high risk EV purchase decision.
That is why Hyundai chose to borrow a page from the cell phone industry’s playbook. In the subscription model, customers put virtually no money down and pay a monthly fee. In return, customers get to enjoy the use of the latest smart phone technology where it would otherwise be priced beyond their means. Similarly, Hyundai’s “Ioniq Unlimited” program embraces a set price model in which Ioniq EV customers will be guided through a no haggle buying process almost entirely online, only visiting the dealer for an extended test drive or to take final delivery. The program targets Millennials, who are not only more likely to consider an EV, but prefer a shopping experience akin to the likes of Amazon or Apple. Hyundai’s execs sees this trend as the wave of the future and the Ioniq EV is an experiment to test that hunch.
Hyundai’s Ioniq Unlimited program takes aim at a number of the obstacles standing between new car customers and EV sales. It promises a simpler, more guided process that should help take some of the uncertainty out of making the switch to an EV. Should Hyundai’s innovative retail approach for EVs prove successful, as we think it will, other automakers will hopefully get wise sooner rather than later, and follow suit.